March 6, 2015
Effective for the 2015 proxy season, all non-venture issuers reporting in nine Canadian Provinces and Territories must disclose the representation of women on boards and in senior management. These new obligations follow a comply or explain why model, and the regulators are watching – and so are actual and potential investors.
5 NEW DISCLOSURE OBLIGATIONS
Effective December 31, 2014, the securities regulatory authorities in each of Nova Scotia, New Brunswick, Newfoundland and Labrador, Ontario, Manitoba, Northwest Territories, Nunavut, Quebec and Saskatchewan amended National Instrument 58-101 Disclosure of Corporate Governance Practices. The amendment imposes 5 new disclosure obligations, specifically related to women on boards and in senior management, for non-venture issuers reporting in these Provinces and Territories.
Starting with the 2015 proxy year, they must disclose this information in the proxy circular or the annual information form filed following its financial year ending on or after December 31, 2014:
WHY COMPLY
This particular obligation follows the “comply or explain why” model. The securities regulators monitor circulars for compliance with all disclosure obligations, including these new ones, assessing the robustness of the disclosure – and the explanations for non-compliance.
But they’re not the only ones watching: many investors – actual and potential – are watching too. The Canadian Securities Administrators expressly noted these amendments are intended to “increase transparency for investors and other stakeholders regarding the representation of women on boards and in senior management of non-venture issuers … to assist investors when making investment and voting decisions.” More and more investors follow internal policies or guidelines that restrict investments to issuers that comply with securities regulations, including disclosure obligations like these. So issuers that want their money will need to comply or give a darn good reason why.
Each Province and Territory that adopted this amendment has notice of it posted on its relevant website. Read the Ontario amendment to National Instrument 58-101 Disclosure of Corporate Governance Practices.
Please contact your McInnes Cooper lawyer or any member of our McInnes Cooper Corporate Governance & Compliance Team to discuss this topic or any other legal issue.
McInnes Cooper has prepared this document for information only; it is not intended to be legal advice. You should consult McInnes Cooper about your unique circumstances before acting on this information. McInnes Cooper excludes all liability for anything contained in this document and any use you make of it.
© McInnes Cooper, 2015. All rights reserved. McInnes Cooper owns the copyright in this document. You may reproduce and distribute this document in its entirety as long as you do not alter the form or the content and you give McInnes Cooper credit for it. You must obtain McInnes Cooper’s consent for any other form of reproduction or distribution. Email us at [email protected] to request our consent.
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